As reported by B S Raghavan on on 19 March 2008:
Need for boost from Finance Commission -

Need for boost from Finance Commission

"Robust economic growth has thrown up many new challenges, among them the need to put in place effective monitoring, evaluation and accounting systems for the large sums of money that are disbursed by the Central Government to State Governments, district-level agencies and other implementing agencies' we do not pay enough attention to outcomes as we do to outlays; or to physical targets as we do to financial targets; or to quality as we do to quantity."

- P.Chidambaram in his Budget Speech of 2008-09

Why is it that India is notoriously deficient in respect of implementation, maintenance and service delivery?

For all the talk of performance budgeting and accountability, and for all the reams of paper devoured by citizens� charters and elaborately composed write-ups detailing procedures for redress of public grievances, there has, as yet, been no full-scale shift in the working of the government and public sector from an emphasis on outlays to an emphasis on output s and outcomes, from a focus on asset creation to a focus on asset operation and maintenance, from compliance with procedures to a drive for better performance and from policy design toward policy implementation.

No doubt, people use their franchise to throw out non-performing governments, but in between elections, they have no means of controlling the behaviour of governments and legislatures, except perhaps by taking recourse to the Right to Information (RTI) Act as a means of spotting and exposing laches, or by invoking the authority of the Courts through public interest litigation.

There are gratifying news reports of the RTI Act being put to use to speed up action on pending schemes and improve service delivery. A notable example is that of the Catalyst Trust, an NGO of Chennai, which brought to light, by using the RTI Act, that huge amounts collected as education cess by local bodies were either lying unutilised or being diverted to general purposes, while educational institutions were going without basic facilities.

Regrettable omission

But leaving the citizens to their own devices and to fend for themselves in this manner in effect amounts to abdication by the Central and State Governments of their paramount duty to exercise due diligence and vigilance against any backsliding from minimum essential parameters of performance. The most harrowing experiences of citizens are in their day-to-day dealings with officialdom.

There has been a regrettable omission on the part of governments in the States and at the Centre to prescribe and enforce stringent standards of productivity and output by each grade of employees and weeding out surplus employees as also those who consistently fail to measure up to the degree of responsiveness to people�s urges and commitment to public service.

The public continues to be in the dark about the action taken on the recommendations in this regard by the K. P. Geethakrishnan Commission for the Centre and A. M. Swaminathan Commission for Tamil Nadu. There is no news of any other State having undertaken any such exercise.

Both the Central and State Governments should be particularly unsparing in disciplining employees who are lethargic and callous in the area of basic services such as water supply (both rural and urban), food security, power, education, policing, sanitation, promotive, preventive and curative health services, construction of rural roads, and implementation of poverty programmes.

The report card system which the Prime Minister has introduced for Ministries at the Centre should be extended to all government departments and agencies as well as the panchayati raj institutions all over India.

The Finance Minister, P. Chidambaram, deserves kudos for bringing out for public information outlay-outcome statements which serve as the basis for gauging the performance of different Ministries. However, for them to be of help in enhancing the extent of watchfulness by informed citizens over the processes of governance, they should be made simple, intelligible and up-to-date, instead of being cumbresome and confusing as at present. This also applies to the Web sites of Ministries and departments, many of which do not reflect the latest position.

Alternative means of toning up service delivery by engaging community participation, civil society organisation and public-private-partnerships should also be explored side by side with calling the governments to account. The extract from the World Bank�s Development Policy Review titled �India - Inclusive Growth and Service Delivery� dated May 29, 2006 (box) explains how such alternative means can be pressed into service.

Mechanisms for monitoring

The Finance Minister, in his Budget speech, has announced his decision to establish a Central Plan Schemes Monitoring System and a comprehensive Decision Support System and Management Information System to buttress the process of concurrent evaluation based on the monitoring of scheme-wise and State-wise releases for about 1,000 Central Plan and centrally sponsored schemes in 2008-09. This will be supplemented by independent evaluations conducted by research institutions.

The need to put into operation such systems in the States is of much more critical importance. In fact, the huge amounts made available to the State Governments in terms of the recommendations of the Thirteenth Finance Commission will go in vain unless it also sets apart special allocations to enable the States to strengthen their monitoring, review, evaluation and surveillance setups and to staff them with sufficient number of competent professionals to ensure that policies, projects and schemes do not remain on paper but are translated into concrete achievements on the ground in a timely and cost-effective manner.

For this purpose, it should work out a composite index of implementation, maintenance and service delivery with a duly assigned weight on the model of the matrix of population, geographical area, tax effort, fiscal discipline and indices of infrastructure, decentralisation and deprivation it has devised for determining inter se shares of States from the divisible pool of taxes and inter se allocation of grants.

Far more important than tightening up of systems and procedures and attuning Ministries and departments to comply with the mandates of accountability and results-orientation is the imparting of vigour and dynamism by the chief political executive to all levels of governance. This he can do both by personal example and by putting associates, aides and employees on notice that there will be zero tolerance of indifference and negligence in the matter of discharge of public duties culminating in harassment of the people.

By just displaying keen interest in the progress of schemes and execution of tasks, or even from time to time holding monitoring and review meetings at his level (as Jyoti Basu used to do when he was Chief Minister of West Bengal), a Chief Minister or the Prime Minister can bring about a dramatic turnaround in the spheres of implementation, maintenance and service delivery.

Alternative means of toning up service delivery

One mode of improving services is to push for greater community involvement particularly by the users of the services. In rural water supply, especially, (but also in other rural infrastructure) there has been a shift towards demand-driven schemes in which the communities take responsibility for functions.

A recent study estimated that, in Uttar Pradesh, rural water supply schemes that are demand-driven, such as Swajaldhara, see 90 per cent of funds reaching beneficiaries in terms of new capital expenditures, whereas for supply-driven schemes the figure is as low as 40 per cent.

A second mode of engagement with non-state providers is through the contracting out of specific services, without transfer of ownership of assets. This is commonly used in infrastructure where the assets are large and competition is not feasible but managing the assets is important. The recent moves towards management of airports are an example.

Again, contracting out is not limited to infrastructure and there are numerous examples from the health sector. A number of States (Karnataka, Gujarat, Tamil Nadu, among others) contract NGOs to run primary health care facilities.

Role of PPPs

Public-Private-Partnerships (PPP) can play an important role in meeting infrastructure demand, particularly when investment needs for new assets are large, but require the public sector to strengthen capacities.
Both the Centre and the States should use PPPs more intensively to help meet gaps in the provision of infrastructure services.

India has made progress recently in other sectors, such as ports and roads.
A survey undertaken by the World Bank showed almost 90 PPP projects in the transport and urban sectors that were either operational or at an advanced stage of implementation, with total project costs of around Rs 3,39,500 crore. In fact, India has overtaken Brazil and China in attracting PPP.